Facebook: Why has your stock plummeted?
7. Juli 2020
Among the best known companies worldwide we always find Facebook in the top. Whether because of its popularity or because of the controversies it has faced recently, the relevance of this company Bitcoin Loophole is undeniable. However, recently its shares plummeted and here we explain more about it.
Facebook has evolved to become more than just a social network. Since its birth in 2004, the American company has grown to become what we know today. Much of this has to do with its use for advertising.
However, the latter has brought Mark Zuckerberg, Facebook’s CEO, and the entire company all sorts of disputes. Recently, a debate has arisen about what the company’s responsibility should be in tackling hate speech that may be spread on the social network.
This is obviously a sensitive issue. We would be dealing with a fine line between freedom of expression and the condemnation of speeches that could harm others considerably.
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How has this whole dispute influenced the collapse of Facebook’s stock?
Since June 25th, Facebook shares have been in a kind of free fall, with a 8.32% plunge last Friday.
The reason for this is the number of companies that have decided to remove their ads from Facebook. These companies were inspired by the #StopHateForProfit campaign launched by civil rights groups, including the NAACP and the Anti-Defamation League, on June 17.
They include Verizon, Unilever, Starbucks, Honda, etc. Naturally, the effect of this was reflected in the value of their shares.
To understand the magnitude of the damage, we must know that Facebook generated US$69.7 billion in advertising last year. With this, it ranked only behind Google as the second largest digital seller.
Thus, according to Luis Di Como, executive vice president of global media at Unilever, „Continuing to advertise on these platforms at this time would not add value to individuals and society. We will be monitoring on the way and will reconsider our current position if necessary.
This is more or less the position of companies that have joined what has been informally called the „Facebook Boycott“.
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What will the company do about it?
In the interest of regaining the trust of shareholders and investors, and of the very companies that have withdrawn their advertising, some Facebook executives have declared changes in their policy against hate speech.
While in May Zuckerberg commented in interviews that he did not believe Facebook had the role of a true arbiter of everything people said online, things have now changed somewhat.
What is happening is that soon Facebook will hide or block content that is considered „hateful“ or that could „hurt the vote“, in the upcoming U.S. elections. No exception for any politician.
However, it will be necessary to evaluate the effectiveness of their measures and the commitment that Facebook puts into carrying them out. Otherwise, their actions will continue to fall as more and more companies decide to join the protest.